Central District Consumer Bankruptcy Attorney's Association

The point I was trying to make is that while of course a selling
sole shareholder of a business can choose to continue working for a
business being sold, the seller cannot be required involuntarily to do
so. In most instances the small business owner is an important portion
of the goodwill value and many times the technical operation of the
business. Accordingly that fact decreases the value of the business to
any potential buyer if the seller is not at least participating in the
business operation for a while after the sale. In the Chapter 7
scenario, sure the trustee could take over and operate the business,
but the debtor cannot be forced to work there like an indentured
servant. Nor can the debtor's ongoing assistance to the business be
required involuntarily as terms for the sale by the Chapter 7 trustee.
In most instances this lowers the value of the business.
Your example sounds as though it may be the exception to the typical
scenario. If your example is one where the sole shareholder's efforts
are not a significant contribution to the value of the ongoing
profitable business, then I think prudence on the attorney's part
requires recommending at least seeking the opinion of a business
broker to evaluate the stock's potential sales price for the business
as an ongoing concern. Depending on the type of business and its
complexities the potential debtor may need to obtain a full fledged
appraisal. Presuming as you indicate the the potential debtor already
knows the broker valuation/appraisal of the ongoing concern is going
to be higher than the liquidation value I would list the valuation of
the ongoing concern rather than the liquidation value on Schedule B.
Doing otherwise would appear to be a bad faith intentional false
undervaluation of the asset. That is not a can of worms you want to
open.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED
RECIPIENT OF
THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE
PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED.
PLEASE NOTIFY
US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
On Mon 25/01/10 10:55 PM , "Mark J. Markus" bklawr@yahoo.com sent:
I get what you're saying, but I'm not sure that's correct. The
Trustee in a Chapter 7 case would take over the 100% ownership and
could, if he wished, run the business, or sell to someone who could
run the business. The value of the business as an ongoing concern is
significantly higher than the liquidation value (in this particular
case it operates in the black and gives the debtor an annual 6-figure
income).
At the moment I'm just trying to advise the debtor whether he needs
to pay for a business valuation, or if we can just do a quick
liquidation valuation and stick that in Schedule "B". Obviously this
also affects the amount he has to pay out in the Chapter 13.
************************* Mark J. Markus Law Office of Mark J.
Markus 11684 Ventura Blvd. PMB #403 Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax) web: http://www.bklaw.com/ This
Firm is a Qualified Federal Debt Relief Agency (see what this means at

The post was migrated from Yahoo.

I get what you're saying, but I'm not sure that's correct. The Trustee
in a Chapter 7 case would take over the 100% ownership and could, if he
wished, run the business, or sell to someone who could run the
business. The value of the business as an ongoing concern is
significantly higher than the liquidation value (in this particular case
it operates in the black and gives the debtor an annual 6-figure income).
At the moment I'm just trying to advise the debtor whether he needs to
pay for a business valuation, or if we can just do a quick liquidation
valuation and stick that in Schedule "B". Obviously this also affects
the amount he has to pay out in the Chapter 13.
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/)
________________________________________________
NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
On 1/25/2010 9:57 PM, Mark T.Jessee wrote:
>
>
> I see this as something that has the same value listed in Schedule B
> regardless of the chapter filed. Debtor's intersest is the stock in
> the corporation. The value is whatever price that stock interest can
> reasonably be sold to a buyer without the debtor being required to
> continue working there or the net liquidation value, whichever is
> higher. He might be able to sell if for more if he continued
> working there as a transition, but that agreement to work for the new
> owner is a postpetition intangible asset that should not play a factor
> in the value as listed in Schedule B when filed.
>
> Mark T. Jessee
> Law Offices of Mark T. Jessee
> "A Debt Relief Agency"
> 50 W. Hillcrest Drive, Suite 200
> Thousand Oaks, CA 91360
> (805) 497-5868
>
> NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED
> RECIPIENT OF
> THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
> LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
> DISSEMINATION,
> DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE
> NOTIFY
> US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
> MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
>
> *On Mon 25/01/10 4:48 PM , "Mark J. Markus" bklawr@yahoo.com sent:
> *
>
> In a Ch. 13 context only, what value does a debtor need to list on his
>
> schedules for his 100% interest in an S-Corp:
>
> The liquidation value of the corp, or the value as an ongoing
> operating
> business (it can be taken over by someone else and operated).?
>
> --
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)509-1460 (fax)
> web: http://www.bklaw.com/
> This Firm is a Qualified Federal Debt Relief Agency (see what this
> means at
> http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/
> )
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law
> office of Mark J. Markus that may be privileged. The information
> is intended for the use of the addressee only. If you are not the
> addressee, note that any disclosure, copy, distribution or use of
> the contents of this message is prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements
> imposed by the IRS, we inform you that any U.S. tax advice
> contained in this communication (or in any attachment) is not
> intended or written to be used, and cannot be used, for the
> purpose of (i) avoiding penalties under the Internal Revenue Code
> or (ii) promoting, marketing or recommending to another party any
> transaction or matter addressed in this communication.
>
>
>
>

The post was migrated from Yahoo.

I see this as something that has the same value listed in Schedule B
regardless of the chapter filed. Debtor's intersest is the stock in
the corporation. The value is whatever price that stock interest can
reasonably be sold to a buyer without the debtor being required to
continue working there or the net liquidation value, whichever is
higher. He might be able to sell if for more if he continued
working there as a transition, but that agreement to work for the new
owner is a postpetition intangible asset that should not play a factor
in the value as listed in Schedule B when filed.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED
RECIPIENT OF
THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE
PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED.
PLEASE NOTIFY
US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
On Mon 25/01/10 4:48 PM , "Mark J. Markus" bklawr@yahoo.com sent:
In a Ch. 13 context only, what value does a debtor need to list on
his
schedules for his 100% interest in an S-Corp:
The liquidation value of the corp, or the value as an ongoing
operating
business (it can be taken over by someone else and operated).?
--
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/ [1]
This Firm is a Qualified Federal Debt Relief Agency (see what this
means at

The post was migrated from Yahoo.

In a Ch. 13 context only, what value does a debtor need to list on his
schedules for his 100% interest in an S-Corp:
The liquidation value of the corp, or the value as an ongoing operating
business (it can be taken over by someone else and operated).?
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/)
________________________________________________
NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.

The post was migrated from Yahoo.